Answer: $598,500. 4. An analysis of past maintenance costs indicates that maintenance cost is an average of $0.20 per machine-hour at an activity level of 10,000 machine-hours and $0.25 per machine-hour at an activity level of 8,000 machine-hours. If this activity is within the relevant range, what is the total expected maintenance cost if the activity level is 8,700 machine-hours? Answer: $2,000. 5. Given the cost formula Y = $15,000+ $5X, total cost at an activity level of 8,000 units would be? Answer: $55,000. 6. At a sales level of $300,000, James Company's gross margin is $15,000 less than its contribution margin, its net income is $50,000, and its selling and administrative expenses total $120,000. At this sales level, its contribution margin would be? Answer: $185,000. 7. Gasson Company is a merchandising firm. Next month the company expects to sell 800 units. The following data describe the company's revenue and cost structure: Selling price per unit: $40.00 Sales commission: 5% Purchase price (cost) per unit: $18.00 Advertising expense: $4,000 per month Administrative expense: $4,500 per month plus 15% of sales Assume that all activity mentioned in this problem is within the relevant range. The expected contribution margin next month is? Answer: $11,200.